Interval Ownership Robert S. Freedman TPA#2264585

Historical Perspective Historically speaking, timeshares are structured as either a timeshare estate or a timeshare license Timeshare estate = conveys an interest in real property (either perpetual or for a term of years, usually tied to an underlying ground lease) coupled with a right to use accommodations Timeshare license = gives the right to use accommodations but without an underlying property interest TPA#2264585

What is the timeshare regime? must first explore local and state requirements that would be applicable to the project do not assume that state law is the only law that controls or applies may turn on whether the developer owns fee title to the underlying property TPA#2264585

Basic Timeshare Structures condominium condominium units and common elements units are divided into weeks or interests can have a timeshare estate consisting of a tenant-in-common interest in a condominium unit unit owners collectively own the underlying property cooperative underlying property is owned by the cooperative association purchasers receive a share in the association which enable exclusive use of certain accommodations no deed of any interest in the underlying property TPA#2264585

Basic Timeshare Structures undivided tenant-in-common interest CCR’s are recorded against the underlying property purchaser receives a deed to an undivided tenant-in-common interest in all or a portion of the underlying property be sure to look at subdivision laws – this might cause problems in being able to convey the interest trust relationship underlying property is conveyed to the trust purchasers are beneficiaries of the trust no deed of any interest in the underlying property trust documents govern use and occupancy is the way many European timeshare projects are created TPA#2264585

Types of Use Plans Fixed week and unit Fixed week/floating unit Floating plan Points Hybrids with preferred reservation features and specific assignments TPA#2264585

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Tax implications for structuring Windrifter decision – sale of a timeshare license is a “lease” “to deed or not to deed – that is the question” real property interest vs. personal property interest state and local taxes particular to timesharing TPA#2264585

Exchange Programs optional membership, but it is so attractive to a purchaser that nearly all get involved in an exchange program you deposit a reservation for your timeshare, and then withdraw occupancy rights in another location TPA#2264585

Multisite Vacation Clubs multiple timeshare projects are joined together to allow cross-occupancy through a master reservation process often utilize a points system to guage the level of accommodations that can be reserved for occupancy gives purchasers more options and flexibility when purchasing a timeshare interest, making the product more attractive for sale TPA#2264585

Resales often hard to accomplish needs to be a secondary resale market to ensure health of timeshare projects TPA#2264585